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Here’s the latest Youtube video, following on from one earlier about steps involved in buying property.
Always important to know what to look out for if you are in the property market, especially if you are a first-timer or newbie!
If you are more of a reader than a viewer, here’s the edited transcript below:
Things To Consider When Buying Property
For most households, buying property is the largest expense we will incur, so we want to get it right.
Here are some general things to consider:
Research Local Area
These may be such things like high vacancies or over-supply in the local area.
- An over-supply of properties in the surrounding area can be an indication of an area’s lack of desirability both from a tenant and owner perspective.
- It could also mean that yours is one of many similar properties with no distinguishing features to increase the value of a property.
Surrounding development approvals and proposals.
- It’s always good to check with the local council if there are any pending development applications in the surrounding area before buying a property.
- This is because an undesirable development can significantly reduce the value of the surrounding properties.
- For example, a new public housing commission block, or a proposed electricity sub-station.
- It could also be a new apartment tower which blocks out any views your property once held.
Check the zoning details of the property.
- This could include any heritage overlays that the property may have, which severely restricts what works can be done to the property itself.
- The same goes with any easements or covenants with the lot itself. You will find these on the title details but basically easements may be things like a gas pipe running below your backyard or a drainage pipe along the side.
- Covenants are restrictions placed on the title deed, e.g. a lawyer might place a covenant on a deceased estate – your solicitor should let you know if there are any issues with the title.
- Zoning changes may also work in your favour if there are any proposed zoning changes.
- Usually in metro areas, zoning changes increases the density allowed for redevelopment of land – which can significantly increase the value of your property
Check Out The Property
Are there any obvious issues with the property?
- Most of us know what we like and what we don’t like when we inspect a property. But unless you are a seasoned investor, renovator or builder – it’s hard to know what is a deal-breaker, and what can be fixed.
- This is why it’s imperative to obtain a building and pest inspection report before you buy any new property from a qualified professional.
- Bear in mind cost of renovations, often outstrip any value they add.
- For example, a significant roof repair costs thousands, but as it is not visible – does not really add much to the value. The same goes with fixing a poor water-proofing job.
- The same goes with significant termite or timber pest damage, if you don’t know what to look out for, get a professional to have a look.
What About Things That Can Add Value?
There are also a few things to look out for which can potentially increase the value of the property, such as:
Potential to add extra rooms or parking.
- These do add value to a property, so be on the lookout for a favourable floorplan or property site.
- If there is an opportunity to change a floor layout to fit an extra room, or parking space – for a relatively cheap cost, this can increase your return greatly.
Potential to add value.
- Redevelopment of the land such as building a duplex, or subdividing the block, or installing a granny flat can add value to your property.
- These are best checked with the local council before making any purchase.
Quality of surrounding homes
- We’ve all heard of the saying, “owning the worst house in the best street”.
- This is because good neighbourhoods increase appeal.
- Buying a property surrounded by beautiful properties increases the appeal of yours.
Changes in Demographics
- Certain changes in the local demographics can greatly affect the value of not just the property, but the suburb itself.
- This is because of the ripple effect in which case buyers are priced out of more affordable areas; or the emergence of “café” culture, in which case you will start to see local cafes popping up and being full on weekends.
Some Other Considerations
A few of the other things to consider may be:
Lack of visual appeal
- Don’t worry if the property has good bones but is an “ugly duckling”, many minor things can be fixed.
- Indeed there are some people who make a living renovating old and tired properties, and flipping them into newer, shinier properties.
- The same goes with the wallpaper, paint and colour schemes.
- Don’t get suckered into what’s at face value – you can change all those relatively affordably.
- It’s the size, lighting, floor plan, outlook, direction and overall aspect of the property which you should focus on instead.
- No one wants to live next to the neighbours from hell, but it’s often a lucky dip to see if you can avoid one.
- But a trick I use is to view any potential I am interested in at all times of the day and week.
- For example, a Saturday night compared to a Sunday morning, or 6pm Thursday night with midday on Monday’s.
- This way you can generally tell what type of people live next door
Always obtain professional advice.
- At the very least engage a legal representative like a solicitor or conveyancer and a building and pest inspector to help you with anything you are unfamiliar with.
Hope you guys liked the video and/or transcript.
Important to note peeps that I’m not here to scare anyone.
With real estate – 99 times out of 100, issues can be dealt with.
It’s just that 1 out of 100 issue we need to avoid.
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